Why the foreign exchange reserves keep on rising and what does it indicate?
Answer
Answer
India’s forex reserves increased by $7.8 billion in the week ended Nov 06 to touch a lifetime high of $568.50 billion. The jump in reserves was largely on account of an increase in foreign current assets. RBI intervention was also very limited and that conserved forex.
Even the gold reserves for the latest week rose by $1.33 billion to $37.6 billion. In addition, the special drawing rights or SDRs of the IMF rose to $1.488 billion during the week. India’s reserve position with the IMF stood a tad higher at $4.7 billion.